Refund Program to Help Expand Broadband Internet Service

Refund Program to Help Expand Broadband Internet Service

Sacramento Bee

By Rachelle Chong and Lloyd Levine | July 12, 2016

his year is turning out to be a bellwether year for internet law and policy. In June, a federal court ruled that high-speed internet is an essential “utility” and should be available to all Americans. In February, the Federal Communications Commission redefined broadband internet as a Title II common carrier service, moving it from an information service to a telecommunications service.

Because of these decisions, federal law now requires that broadband infrastructure be extended to all households, and that the digital divide must be closed, meaning all Americans must get trained in basic internet skills to be digitally literate.

California, like the rest of the country, still has much work to do to close the digital divide. According to the 2015 Field Poll study, one-fifth of Californians do not have high-speed internet at home. More startling, an April 2016 Public Utilities Commission report found that only 43 percent of rural households have access to reliable broadband service.

The divide is due to the cost of broadband for consumers and the expense involved in deploying infrastructure in rural and remote areas. Laying fiber optic cable in a state as large and geographically complex as California is expensive. Incentives have proved necessary to entice competitive internet service providers to make the required capital outlays and investments in infrastructure. This is why during our terms of government service, we conceptualized and helped found the California Advanced Services Fund program at the PUC.

The fund program is an innovative public-private mechanism. It funds broadband infrastructure in areas with no internet service or very slow dial-up service; in other words, where the free market – consisting of telephone companies, cable operators, wireless internet providers and others – has failed to bring fast internet services to its residents. Funding for the program has come by charging a few pennies per month on Californians’ phone bills and by requiring matching funds from willing broadband providers.

To date, the program has funded 56 broadband projects, bringing broadband to over 300,000 households. The average cost per households has been $1,363, of which only $441 has come from the program because California has been able to leverage federal funds. The program is highly cost effective at achieving its mission, especially when compared to the federal Connect America Fund average of $2,550 per household.